Last tuesday, Shell and Gabon’s ministry of petroleum signed a memorandum of understanding. For many analysts, this signals a strong vote of confidence in the country’s attractiveness for offshore oil. Especially since Shell follows two other giants — ExxonMobil and BP had already shown interest in deepwater zones less than a year ago. This suggests Gabon is once again becoming an appealing destination for major companies. However, a closer reading tempers the widespread enthusiasm.
The document is merely a declaration of intent, not a binding commitment. A very long path remains before actual extraction and sale of oil. Shell could easily change its mind later: if exploration results are poor, if oil prices drop, or if it finds a more profitable country, it can walk away without penalty. This is not the first time Gabon and the British firm have crossed paths. Shell was already present, left Gabon in 2017 and definitively in 2019. Its return today primarily serves its own strategy, not a favor to Gabon.
And it is on precisely this point that the government holds a slight advantage. At this stage, it must negotiate skillfully. What share of revenue will go to the state? How many jobs and training opportunities for Gabonese? And then, how will the money be managed when it arrives? Will it be saved to build the future, or spent immediately? For context, commercial production takes between seven and fifteen years. Budgetary and employment benefits would only be visible between 2033 and 2036 at best. From seismic campaigns and appraisal drilling to reactivating subcontracting chains and youth employment, there is much to do.
Gabon is not alone in facing this challenge. Angola and Nigeria have negotiated to extract maximum benefits from such transactions. Cost recovery limits, state share based on profitability, transparency and monitoring – nothing left to chance. The problem is not attracting Shell; the problem is determining the terms.
While neighbours tighten their rules to convert oil profits, especially offshore, into real development, Gabon appears to be negotiating with the same tools that led to failures over the past thirty years. Shell knows this perfectly well: it signs identical MoUs everywhere. What changes is what the host country imposes next.
